Wednesday, January 19, 2005
Video game industry sales reach record pace in 2004

The video game industry enjoyed record sales in 2004, despite a shortage of game consoles over the holiday season, according to figures released yesterday.

The data from NPD Funworld, a market research firm, showed that United States sales of video game consoles, portable devices and the games made for those platforms were $9.9 billion in 2004. That figure is slightly below the overall sales figure of $10 billion in 2003. However, the 2004 figure does not yet include sales of games for personal computers. When those sales are included in a report due in the next few days, overall sales for the year will be a record, NPD said.

The 2004 sales include a surge in sales of games for hand-held devices, which hit $1 billion in 2004, up from $903 million in 2003.

The strong overall sales figures are significant, industry executives said, because they come at a time when video game companies and investors had expected a normal cyclical slowdown in the industry.

Such ebbs have historically come as game console models reach the end of their cycles and consumers wait for the introduction of a new generation of devices. Sony and Microsoft, makers of the two most popular consoles, the Sony PlayStation 2 and the Microsoft Xbox, are gearing up to introduce new consoles in the next 18 months.

This growth is occurring in the twilight of the cycle, said Douglas Lowenstein, president of the Entertainment Software Association, an industry trade group.

Sales were driven by sequels and games for older players. The two top-selling games were Grand Theft Auto: San Andreas, which sold more than 5.1 million copies since October, and Halo 2, which sold more than 4.2 million copies since November, NPD said. The top 10 titles sold for game consoles in 2004 accounted for 15 percent of overall sales, NPD said.

The top titles also showed the strength of Take-Two Interactive, a video game publisher and distributor based in New York. It distributed 3 of the top 10 games, including Grand Theft Auto: San Andreas and a football game called ESPN NFL 2K5. The only other company to have three Top 10 games was Electronic Arts, the largest independent video game maker.

Over all, sales of games for consoles and portable devices was $6.2 billion. Sales of games for personal computers were $700 million from January through November, with full-year figures expected soon.